Unemployment in EU Member States: Evidence on the Influence of Economic and Demographic Factors

Valentin-Marian Antohi, Costinela Fortea, Monica Laura Zlati and Rohail Hassan
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Valentin-Marian Antohi: Dunarea de Jos University of Galati, Romania
Costinela Fortea: Dunarea de Jos University of Galati, Romania
Monica Laura Zlati: Dunarea de Jos University of Galati, Romania
Rohail Hassan: Othman Yeop Abdullah Graduate School of Business (OYAGSB), Universiti Utara Malaysia, Kuala Lumpur, Malaysia & School of Business, VIZJA University, Warsaw, Poland

Economics and Applied Informatics, 2025, issue 2, 210-222

Abstract: The European Union is marked by economic, social and demographic challenges and understanding the determinants of unemployment becomes important for the formulation of effective and sustainable public policies. The study aims to investigate the influence of the main economic and demographic factors on the unemployment rate in the 27 Member States of the European Union, based on a multiple linear regression model applied on panel data for the period 2012-2023. By integrating variables such as real GDP per capita, government spending on pensions, public investment in fixed capital, fertility, life expectancy and the number of pension recipients, the research explores both the structural dimension of the labor market and the impact of annual shocks on employment. The econometric results show that economic performance has a significant negative impact on unemployment, supporting the hypothesis that increases in GDP per capita contribute to reducing unemployment. It also confirms a negative relationship between the number of retirees and the unemployment rate, suggesting that the withdrawal of the older population from the labor force alleviates the pressure on the labor market. Based on the findings, the study provides recommendations for public policies aimed at strengthening economic growth, smoothing the demographic transition and strengthening institutional capacity to respond to crises. The paper contributes to the literature by taking an integrated approach to the relationship between the economy, demography and employment, providing a valuable comparative perspective for labor market policy-making in the European Union.

Keywords: unemployment; European Union; economic growth; public policies; pension system (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2025:i:2:p:210-222

DOI: 10.35219/eai15840409530

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